El Cid arrives in Oz for murder, and is one of the most respected inmates amongst the Latinos. He immediately ousts Alvarez, the current leader, whom he considers to be "too white." Alvarez is light in complexion but what El Cid really means is that he doesn't think he is man enough to be among El Norte. He is fully supported by fellow Latino Carmen Guerra. While managing El Norte, a new Latino CO named Eugene Rivera is hired. Rivera was in Los Diablos, a rival gang of El Cid's, and promises to make Hernandez's life a living hell while working in Oz. Alvarez wants to be in El Cid's good graces and El Cid then tells him that he can be in El Norte again if he blinds Rivera. Alvarez is stunned that he must do this but will eventually do so. In the meantime, Rivera is looking for any excuse to brutalize Hernandez, nearly beating him for the most minor infractions. Hernandez then tells Alvarez to hurry up, calling him "white boy" and the anglicized version of his name, "Michael." Alvarez blinds Rivera and then is let back in by Hernandez.

A new inmate named Carlo Ricardo arrives in Oz. Alvarez is also in the gang for the time being, so El Norte is in a power position to get in the drug business. Alvarez is let out of solitary under the condition that he does interaction sessions with Rivera, who is now blind. Hernandez is weary of this for he still does not fully trust Alvarez. Alvarez is asked to box in the prison tournament and loses to a gay inmate (whose lover according to Ryan O'Reily was targeted for rape by the Latinos) in the first round. The Latinos are mocked by various inmates and Hernandez furiously attacks Alvarez. During the attack, CO Clayton Hughes wounds Hernandez with a smuggled stun gun. Meanwhile, Guerra is suspicious of Irish inmate Ryan O'Reily, who is winning every boxing bet whether placed on his brother Cyril or other inmates such as Jason Cramer the gay inmate who beats Alvarez. Hernandez has the two of them stay away from each other because he seems to respect O'Reily and does not feel there is a need to go to war with the Irish inmates. He is then approached by Simon Adebisi with a business proposal: if the Latinos help Adebisi get revenge on the Homeboys, the two of them can work with the Italians in running the drug business. Hernandez accepts, surprised that Adebisi is instigating violence against his own race. In the cafeteria, Hernandez has Ricardo, Guerra, and Alvarez take down black inmates Poet and Pierce. They are beaten unconscious, and Adebisi scars them with hot soup, making it look like an accident. The Latinos now run the drug business with the Italians and the Homeboys under Adebisi. Alvarez is also allowed in for the time being. As they run the Drugs with the Blacks and Italians, El Cid asks O'Reily to stop dealing and has Alvarez confiscate his remaining drugs. Pissed, O'Reily then tips off CO Sean Murphy that Hernandez has drugs on him. Murphy leads the COs towards the Latinos and Alvarez senses them coming and he leaves early so that Hernandez, Ricardo, and Guerra go to solitary without him. Warden Glynn interrogates Hernandez threatening him with an extended sentence, who merely has the Latinos reply "Que" in the interrogation. Because Alvarez did not go with them, he is Hernandez's main suspect of snitching and is targeted for execution upon their return to Em City.

Ricardo attacks Alvarez on orders from Hernandez and then dies. Alvarez survives, but goes to solitary. Adebisi, in the meantime, has been creating racial tension within Oz that has the staff worried about a possible riot. Italian leader Chucky Pancamo points out that there can be no drug dealing if Oz is locked down, and Hernandez agrees that Adebisi needs to at least shut up for the time being. The prison is locked down as New Year's Eve approaches and Hernandez witnesses Clayton Hughes smuggling a gun into Adebisi's cell.

Hernandez wants Alvarez dead as Oz is no longer locked down, and has Guerra send Louis Bevilaqua to kill him. Bevilaqua is killed as he is about to make his move, so they use Carlos Martinez to make an attempt on Alvarez's life. Miguel escapes Oz though through a tunnel dug by Agamemnon Busmalis. Hernandez puts word on the street to kill Alvarez at the first sighting. Meanwhile, amid the racial tension, Hernandez snitches on Adebisi for supplying a gun to a white inmate who ended up killing some black inmates. He reveals to Glynn that it was Clayton Hughes who gave Adebisi the gun, and Adebisi is sent to solitary as a result. Pancamo thinks that Hernandez is breaking down, and tells new Latino inmate Enrique Morales that if he eliminates El Cid, that he can control the Latinos' third of the drug trade. Morales has elderly inmate Bob Rebadow move in with Hernandez, and orders Rebadow to kill Hernandez or he'd kill Rebadow. Since Rebadow is an old man who is not in any way a discipline problem, he will most likely go free. Rebadow stabs Hernandez in the neck while asleep. Hernandez struggles in vain to kill Rebadow in his last moments, but dies from loss of blood.